What an interesting month June was! The Australian sharemarket, as measured by the ALL ORDINARIES (INDEXASX: XAO) finished the month up by just 0.05%, while the biggest companies, measured by the S&P/ASX 200 (INDEXASX: XJO) fell by a tiny 0.05%.
Out of the ordinary
The overall returns themselves actually weren’t that surprising given the up and down nature of this year, rather it was the companies that bucked the trend that made the month extraordinary.
Some of 2017’s better performing companies like QBE Insurance Group Ltd (ASX: QBE), Domino’s Pizza Enterprises Ltd. (ASX: DMP) and Aveo Group (ASX: AOG) dropped between 10% and 15% after disappointing the market with negative announcements, while some unlikely candidates rose by a similar amount.
- Metcash Limited (ASX: MTS) surged 17% after the company announced the retirement of the CEO and promising earnings news.
- a2 Milk Company Ltd (Australia) (ASX: A2M) jumped 18% after analysts upgraded their forecasts on the back of apparent strong demand for A2’s products in China.
- Qantas Airways Limited (ASX: QAN) shares hit a 10-year high on the back of falling oil prices and a number of broker upgrades pointing to an increasing dividend and rising profitability.
Time to buy?
I think if you’re looking at these companies as potential purchases now, you may have missed the easy gains. It’s not every month that we can expect a huge surge in broker and profit upgrades.
Interestingly, one of the reasons why investors are piling into these companies is because so many stocks of the big, reliable companies no longer look like great value with interest rates being so low and subsequently pushing up prices.
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Motley Fool contributor Andrew Mudie owns shares of QBE Insurance Group Ltd. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.